Alessandro Conti is Italian, retired after selling his textile company and has lived in Sotogrande since 2019. When we prepared his first Modelo 714, his list of financial assets and property was impeccable. The list of everything else did not exist: a 2021 Porsche 911, a 1,200 cc motorbike, a twelve-metre sailing boat moored in the harbour, his wife's and his own jewellery and watches, three one-kilo gold bars kept in a safe deposit box and a collection of contemporary painting, one of whose works has been on loan to a museum in Málaga for four years. "Those are household things," he told us. Some are. Most are not.
What counts as household contents and what does not
Article 4.Cuatro of Law 19/1991 exempts household contents: personal and household effects, domestic utensils and other movable property for private use. But it expressly excludes from that exemption the assets in articles 18 and 19, which are precisely those on Alessandro's list.
| Asset | Rule | Article |
|---|---|---|
| Furniture, appliances, clothes, kitchenware | Exempt as household contents | 4.Cuatro |
| Jewellery and luxury furs | Market value on 31 December | 18 |
| Cars | Market value; the official tables for used vehicles can be used | 18 |
| Motorbikes of 125 cc or more | Market value | 18 |
| Pleasure boats and aircraft | Market value | 18 |
| Works of art and antiques | Market value, except for exemptions | 19 and 4 |
| Investment gold and other assets | Market price on 31 December | 24 |
Nor are household contents presumed as a percentage. The 3 % of the estate rule that many people know belongs to inheritance tax, and Law 19/1991 itself introduced it in its third additional provision for that other tax. In wealth tax, household contents are exempt and are not calculated.
Vehicles and the tables
For cars, motorbikes, boats and aircraft, article 18 requires market value to be used, but allows the taxpayer to use, for assets that appear in them, the valuation tables for used vehicles approved each year by the Ministry of Finance for transfer tax and inheritance tax, those in force on the accrual date. Using them has an advantage: the value is fixed by an official table and is hard to dispute.
With Alessandro's Porsche, which cost him 140,000 € in 2021, the calculation would be:
- Average selling price of the model in the official table in force on 31 December (an assumed figure for the example): 125,000 €.
- Depreciation percentage in the table according to the years of use: the coefficient the table sets for a car of that age is applied.
- If that coefficient were, for example, 60 %: 125,000 × 60 % = 75,000 €.
- Value to declare: 75,000 €.
A dealer valued the car at 95,000 €. With the table, he declares less and also uses an official criterion. The other side of the coin is in article 27: the contradictory expert valuation, which is used to dispute valuations of these assets, does not apply when the table has been used. Whoever opts for it accepts its result.
Jewellery, watches and gold
Jewellery is valued at market value, and here there is no table. The reasonable course is a valuation by a jeweller or auction house, dated close to 31 December. A luxury watch made of precious metal is usually treated as jewellery; a steel collector's watch is more debatable, but in any case it counts at its market value, either under article 18 or under article 24.
Investment gold in bars or coins is not jewellery: it counts as "other assets" under article 24, at its market price on the accrual date. For Alessandro's three bars, assuming a price of 95,000 € per kilo on 31 December:
- 3 kilos × 95,000 € = 285,000 €.
- It is added to the base without any reduction.
It is worth keeping the certificate of that day's price. And there is a second consequence: gold does not produce income, so the part of the tax it generates does not benefit from the joint cap with income tax. We explain it in the income-wealth cap.
Art: market value and four exemptions
Article 19 defines works of art as paintings, sculptures, drawings, engravings, lithographs or similar works, provided they are originals, and antiques as movable property more than one hundred years old whose essential features have not been altered. They are valued at market value. But article 4 contains several exemptions:
- Assets of the Spanish Historical Heritage registered as a Bien de Interés Cultural (an asset of cultural interest) or in the General Inventory of Movable Property, and those of the regions' historical heritage classified and registered under their own rules.
- Works of art and antiques worth less than the amounts set for the purposes of article 26.4 of Law 16/1985 on the Spanish Historical Heritage. Those amounts depend on the type of work and its age; they have to be checked in that legislation for each piece.
- Objects lent on permanent deposit, for a period of no less than three years, to museums or non-profit cultural institutions for public exhibition, while they remain on deposit.
- Artists' own work while it remains in their possession.
Alessandro's work on loan to the museum for four years is exempt while it stays there, provided the deposit agreement meets those conditions. The rest of the collection, 400,000 € according to the valuation he commissioned, is taxed.
The market value of a work of art is debatable by nature. Declaring at the purchase price of fifteen years ago or at an unsupported figure exposes you to a check in which the authorities will produce their own valuation. A recent independent valuation does not guarantee acceptance, but it is the best defence, and it opens the door to a contradictory expert valuation if there is a disagreement.
What Alessandro added up
| Asset | Value declared |
|---|---|
| Porsche 911, by official table | 75,000 € |
| 1,200 cc motorbike, by official table | 9,000 € |
| Sailing boat, by a yacht broker's valuation | 180,000 € |
| Jewellery and watches, by valuation | 60,000 € |
| Gold | 285,000 € |
| Painting collection, without the work on deposit | 400,000 € |
| Total | 1,009,000 € |
More than a million euros that did not appear in his first draft. With his portfolio and his home, that million took him over the 2,000,000 € of assets that oblige you to file Modelo 714 even if the tax comes out at zero; we explain it in from what amount you have to file.
If you have assets of this kind, the wealth tax form lets you attach valuations and invoices. If any of them are outside Spain, remember that a resident is taxed on their worldwide wealth; and if they are cryptocurrencies, which are not gold but are also valued at market value, it is worth also reviewing the Modelo 721 return. The guide on valuing assets for wealth tax completes the rules for all other assets.
Vehicles, art, gold and the rest of your wealth are dealt with on the Salama Tax page on the wealth tax.